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Articles of Association for Hong Kong Companies: A Beginners’ Guide

The Articles of Association is a document outlining the governing principles and rules of a company for when you want to start or register a...

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The Articles of Association is a document outlining the governing principles and rules of a company for when you want to start or register a company in Hong Kong.

In this guide we’ll look at:

  • What is the Articles of Association
  • Contents of the Articles of Association
  • Types of companies that need the Articles of Association
  • How to file and change the Articles of Association
  • Difference between the Articles of Association and the Memorandum of Association

Let’s get started!

What are the Articles of Association?

The Articles of Association is a document that contains the rules and regulations governing the affairs of a Hong Kong company.

It is an essential document for any company, as it sets out the rights and duties of shareholders, directors, and other company members. 

The articles also specify how the company will be managed, how decisions are made, and also educate the general public on aspects of the Hong Kong company.

The Articles of Association is a document that contains the rules and regulations governing the affairs of a Hong Kong company.

What Should be Included in Articles of Association?

The contents of the Articles of Association for a Hong Kong company are divided into mandatory categories and other categories. 

Let’s look at each category in more detail.

Mandatory

The company articles must contain the following clauses:

Company name 

  • If your company has English and/or Chinese names, they should be included in the articles. 

Members’ liabilities

  • For a limited company, the articles should state what limits the members’ liabilities (more on this later).
  • For unlimited companies, the articles should state that its member liability is unlimited.

Company share capital and initial shareholding

  • The total shares a company is planning to issue.
  • The total share capital for founding members, paid and unpaid.

Company objects

  • The articles should state the company’s objects. This applies to limited companies with a license granted under section 103. This requirement is only effective if the license is valid.

Other

The other contents of the articles vary depending on the company. Here is a rundown of some of the contents.

Company organization

  • Directors appointments
  • Directors powers
  • Directors responsibilities
  • Alternate directors appointment and removal
  • Directors insurance

General meetings

  • Notice, quorum, and chairing of company general meetings
  • Rules on voting
  • Votes per member
  • Proxy appointment
  • Members’ rights

Shares and distributions

  • Issues and transfers of shares
  • Interest on shares
  • Share certificates 
  • Alteration of share capital
  • Dividend declaration

Miscellaneous

  • Means of communication
  • Company seal
  • What should happen when a company liquidates

Types of Companies that need an Articles of Association

The Articles of Association is a must-have for the following type of companies in Hong Kong:

  • Company limited by shares: The articles should state that a member’s liability is limited to unpaid shares.
  • Company limited by guarantee: Here is the wording from Section 84 (2) of the company’s act.

The articles of a company limited by guarantee must state that each person who is a member of the company undertakes that if the company is wound up while the person is a member of the company, or within one year after the person ceases to be such a member, the person will contribute an amount required of the person, not exceeding a specified amount, to the company’s assets—

(a)for the payment of the company’s debts and liabilities contracted before the person ceases to be such a member;

(b)for the payment of the costs, charges and expenses of winding up the company; and

(c)for the adjustment, among the contributories, of their rights.”

  • Unlimited company: The articles must state that members’ liability is unlimited.

How to file the Articles of Association?

When establishing a company in Hong Kong, you must prepare and file Articles of Association. Doing so is very straightforward: 

  1. Prepare the document and have it signed by founding members of your company. The document language should be either English or Chinese 
  2. Submit a copy to the Hong Kong Company Registry.

Other than these steps, there are no set rules to follow when preparing articles of association. You can use this sample to get started. Ensure the articles have all the mandatory requirements before submitting them to the company registrar.

The other requirements can be adopted sparingly because they’re not mandatory.

If you’re unsure about how to prepare and file an Article of Association for your company, Binery can help!

If you’re unsure about how to prepare and file an Article of Association for your company, Binery can help!

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How to Amend the Articles of Association?

If you need to amend your company’s articles of association, there are set rules determined by the type of changes you want to make. 

Articles of association can be altered with a special resolution or ordinary resolution. The resolution should be submitted with the relevant forms and the altered articles of association.

Here’s an overview of the changes you can make, plus the requirements.

Type of ChangeRequirements
Change company from public to private or private to publicA certified copy of the altered articlesSpecial resolutionForm NNA4A certified copy of the company’s annual financial statements
Alteration of Company’s objectsSpecial resolutionA certified copy of the altered articlesForm NNA2
Alteration of company’s provisions (excluding company’s objects)Special resolutionForm NNA1A certified copy of the altered articles
Alteration of provisions in the company’s memorandum of association where such provisions should be in the company’s articles of associationSpecial resolutionForm NNA3A certified copy of the altered articles
Alteration to the maximum number of shares that a company may issueOrdinary resolution
Alteration of the number of members in a company limited by guaranteeForm NMEM1
Alteration of company objects and provisionsSpecial resolutions2 certified copies of the altered articlesForm NNA1 and NNA2

The required documents must be submitted to the registrar within 15 days of amending the Articles of Association. If a company contravenes this requirement, the company and every member of the company are liable to a fine of $10,000. There is also an additional fine of $300 per day for all the days the offense continues.

Difference Between Articles of Association and Memorandum of Association

The main difference between the articles of association (AOA) and memorandum of association (MOA) is that MOA is simpler and less formal, while an AOA is more detailed and provides more protection for shareholders.

On March 3, 2014 the new Company Ordinance in Hong Kong abolished the MOA, as the objects clause, which states why a company was formed and the type of business it intends to operate, was only mandatory for limited companies and associations to fill. As the AOA was a more detailed version of the MOA, the government decided to reduce redundancy and make the AOA the only requirement for registering a company. 

The objects clause is no longer mandatory for all Hong Kong companies. As we’ve seen above, the clause is mandatory for limited companies and associations that are licensed under section 103, meaning that unlimited companies are not subject to the objects clause.

If a company was incorporated under the old company ordinance, the MOA is viewed as part of the company’s AOA. Although making changes is unnecessary, the company registry encourages companies to update their articles to avoid confusion.

Updating the AOA is important because the company can take advantage of the new provisions (as of March 3, 2014) in the new company ordinance. Some updates include:

  • Restating the provisions in the MOA and deleting the objects clause
  • Holding meetings in two or more places with the help of technology so company meetings are not limited to physical meetings only
  • No limits on shares issued by directors
  • Alternatives to passing resolutions without a meeting

You can view a sample MOA and AOA here. As you can see from the sample, the MOA is not as detailed and includes the objects clause that states all the activities the company will engage in.

The AOA, on the other hand, is more detailed with information on the type of company, shareholding, lien, general meetings, and more.

Conclusion

To quickly recap:

  • The AOA should include the company name, members’ liabilities, information on shares and distributions, and company objects
  • Hong Kong companies that need an AOA include companies limited by shares, guarantee, and unlimited companies
  • When filing Articles of Association use the models provided or seek help from a professional
  • A company’s AOA can be updated by submitting the altered documents with required forms depending on the type of change
  • The AOA is mandatory for all Hong Kong companies but the MOA is no longer a requirement

Articles of Association are mandatory for all Hong Kong companies, so we hope this guide allowed you to better understand the articles of association and why they’re important.

If you need help with your company’s AOA, please don’t hesitate to contact us. We will save you time and make the process simpler and easier for you.

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